Investment Officek' Names 'Magnificent Seven' Stocks
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Investment officek’ names ‘magnificent seven’ stocks As Steve KroU sees the stock market, there’s a time in '85. He figures the stock, about $119 at press time shellacking tecause of the recession. K-Mart’s to play and a time to stay away... and now’s the time and selling at only about nine times estimated '84 ^earnings peaked in ’79 at $2.84 a share, but Kroll sees to pljiy. earnings, will be a $180 number over the next two. 'that number being exceeded by more than $$.60 a So. the 36-year-old chief investment officer of years. ^ share this year (vs. $3.06 in.’Sk) and over $4.50 In ’$4. Hutton Asset Management — which n^anages $8.7 Dan Dorfman General Motors: It’s one of the most dynamic His stock projection: $55 to $60 in two years, compared billion of funds (mostly mutual fund money) underthe growth stories around, says Kroll, who Ijelieves GM with the current $34 price. Showers tonight; E.F. Hutton banner—bought about $100 million worth Syndicated has the potential to earn $30 a share in '85. (This year’s Champion Home Builders: Reflecting the tremend of stocks the other week. And if the bond market holds net is projected at $10 to $11 a share). Kroll sees a ous pent-up demand (or low-cost housing, CHB, as cloudy Thursday up well —.a closely watched indicator of the vigor of Columnist renew^ consumer love affair with auto^, given the Kroll sees it, should experience ballooning earnings— — See page 2 the stock market — Kroll will soon buy another $25 fact the current U.S. car fleet is the oldest In 10 to 12 20 cents a share this year, vs. 12 cents in '62, and $1 a million of equities. years. Another big plus: Heavy GM cost-chopping share in two years. CHB’s big emphasis is on the “I don’t .want the party to start without me,’*’ he across the board. If the company wasn’t called GM — low-eqd of manufactured housing (the $15,000 to says. which is considered stodgy by many investors — the $25,000 range). Kroll believes the stock, now about $5, . This is a sharp turnabout from his investment Kroll thinks the stock market may flounder a bit, stock, says Kroll, would sell at twice the price. And wilt at least double within two years. strategy of mid-July, when in a two-week period he but he says time is running out on bears. ”It looks like that’s precisely what he’s forecasting — a'doubling to sold over $200 million worth of stocks as he boosted the 1160 (in the Dow) is the floor and the next stop is 1400 around $140 in two years. Holiday Inns: The gaming business (estimated at 40 , cash reserves in the equity accounts ($1.3 billion all by June of ’84,” he says. AMR (formerly American Airlines): The airline percent of this year’s profits) is the big attraction to told) from 4 to 26. percent. Given his expectations bf an improving ’83 and ’84 business seems to be emerging from such past Kroll, who sees the company becoming the most Teachers At that time, Kroil was bothered by a sluggish bond economy, a leveling off of interest rates later this problems as Increased fuel prices and price wars, and successful^gaming operator in Atlantic City. In the If . ' Mstirre. Israelis market, the excessive runup in many new issues and year, a continuing low level of inflation and rising AMR, one of the industry’s best m anage cqmpanies, spring of ‘84. HI will open Jts second Atlantic City the overwhelmMg^preponderance of bullish senti consumer income, Kroll believes the time is closed has .a dynamic profit growth outlook over the next casino, makihg-Jt^ th^first Icompany to have two map out ment. “I felt that stocks had gotten ahead of the hand ”to sit back, relax and enjoy the second leg of the three years, says Kroll. He sees peak earnings of casinos there. More importantly, Kroll says, he’s very fundamentals," he says. bull market.” about $7 a share over the next two years — profits are impressed with Hi’s extensive management controls But since then, he observes, the market has Kroll, who has consistently been among the top 20 currently running at about a $2 annual rate — and be and systems analysis ih the gaming field (vs. a ‘revival’ 2 undergone a correction — with big stocks down about percent in money-management performance since expects the stock, around $31 at press time, to balloon number of rivals which/lack sophistication In this * put Sham ir 7 percent and high-fliers (mostly technology) off 15 to 1975 — initially at Morgan Guaranty Trust and now at to the-high $50^. area). By Sarah E. Hall 30 percent. Hutton — favors seven st^ks he expects to far U niro^: One of the building blocks-of the economy Kroll figures HI will derive 60 percent of its ’84 iterald. Reporter In addition, the new-issue market has cooled off, outdistance the general mawet over the next year. — the'^m pany’s big businesses are tires and profits from gaming operations next year and he sees . there’s an increasing number of bears, and the bond He characterizes them a ^ is “magnificent seven,” chemicals — Uniroyal, is in the throes of a dynamic market, as Kroll sees it, looks like it has made a earnings turnaround, observes Kroll. He sees $6 a share in earnings in ’85. vs. an estimated $3.50 this The air in the Manchester High and here are the names/Md a bit of his thinking on year. He projects a $90 stock price in two years, an 80 School library Tuesday was stuffy bottom. t each: earnings of over $2 a Hhare this year (vs. 76 cents in percent rise from its current price of about $50. in cha^rge and still; the talk was not. As 128 More importantly, he says, auto, housing and retail IBM: “Hercules unchained” is KroH’s view of the ’81) and projects over $3 a share in ’84. Kroll looks for l y sales are not continuing ablhe same blistering levels computer kingpin now that its problems have been the company to reinstate its dividend (eliminated in On the negative side, Kroll would shun both the teachers crowded in the room, as during the spring surge. So we’re getting a quality resolved with the Justice Department. He sees IBM as ’79) and sees the stock, presently around $14, doubling personal computer stocks (because of sharply rising administrators kicked off — with recovery in the economy — not too slow and not too a much tougher competitor in virtually every phase of over the next two years. competition) and the international oils (reflecting his more than usual pep — a semester- JERUSALEM (UPl) - Foreign within a short time span,” Herzog hyper . which is the best of both worlds. The its business and p r^ c ts an accelerated 20 percent- K-Mart: A strong earnings turnaround story is how view that a hefty world-wide production increase In long series of talks on how to Minister Yitzhak Shamir was said. excesses of a recession or hyper-inflation won’t be plus growth rate over the next three years, with IBM Kroll views K-Mart, which went through three bad the face of an improving world economy should put "revive” the love of learning and picked today to succeed Mena- "Therefore, I invited Knesset there. earning $9.20 a share this year, $11.25 next and $13.50 years as its major market, the Midwest, took a the lid on future petroleum price hikes) "revitalize” the curriculum. chem Begin as prime minister and member and Foreign Minister form a new government, virtually Yitzhak Shamir to a meeting. I "I’m charging you to start a assuring continuation of Israel's asked him il he would be ready to renaissance at Manchester High hardline polices on Lebanon and accept the task of putting together Business Watching the Fed: 1 M 2 IMS 1 9 9 0 School, which v^ill spread to the the Palestinians. a new government in Israel,” Moan (amly Incom* state, and on to the nation,” said President Chaim Herzog told Herzog said. t2 6 ,6 S 1 8 2 7 ,8 1 2 8 3 1 ,4 6 2 of luxury car buyers vice principal Gwen H. Brooks. Shamir he had chosen him as "Mr. Shamir informed me on the in Brief Then, to the amusement of many prime minister-designate during a spot that he agrees,” the president clues and cautions No. of affluent famlNet 6.3 7.2 10.7 teachers, she said: "MaybewewlH meeting at the president's official said. Technicom names chief eamtig over $60,000 m iio n mMon miOon succeed in being on the front p/ges UPl photo residence. Shamir. 68, has 21 days Shamir has vowed to continue to present a new government to Begin’s tough stand on leaving Share of total fam let 8.6% t1.1% 16 .6% ' long after Ronald Reagan is no all approaches to the Malacanang DARIEN — Gerald A. Poch Monday has been longer president in 1984.” “You're' Tens of thousands of protesters parliament for approval. Lebanon only when the Syrians named president and chief operating officer of marched toward the Presidential Palace Palace as the crowd abandoned the and Palestine Liberation Organi Technicom International Inc., a telecommunica for iiiferpretation Minimum luxury car price 8 1 2 .6 0 0 8 1 4 .1 3 0 8 1 9 ,0 3 6 all Democrats,' aren't you?,” she "I am deeply convinced that the zation do and expanding Jewish 1.4 1.8 added, as an afterthought.